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How to Find a Manufacturer for Your eCommerce Business
A well-rounded eCommerce store starts with a stellar product idea. But it would all be for nothing if merchants fail to find a compatible manufacturer to bring their concepts to life. If you find yourself in the same predicament, you have come to the right place.
In this blog post, get ready to gain more industry insights on how to find a manufacturer that not only caters to your needs but remains a reliable, long-term partner as well.
Apart from the main event, our conducive tips and tricks are the cherry on top for you to ace this crucial step in maintaining a lucrative business.
Without further delay, let’s jump right into it.
What is a Manufacturer?
A manufacturer is a company that uses raw materials to produce, assemble, design, and deliver products to a wide array of receivers. Its partners can range from wholesalers, retailers, distributors, and directly to consumers.
Manufacturers usually have total control over the supply chain, where they make exclusive products based on their specialty or tailored according to your requirements. Consequently, each company often carries one type of product instead of various miscellaneous goods.
For example, if you partner up with a paper straw manufacturer for your food business, said company is more likely to specialize in paper, food-grade products rather than other materials.
In short, while manufacturers exist in different industries, from textiles, electronics, and furniture to F&B, you are tasked with a duty to seek several manufacturers at once to form a complete inventory.
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Differences Between a Manufacturer and a Supplier
As business owners, there is a large chance that you have seen these two terms standing shoulder-to-shoulder and are sometimes used interchangeably. However, there are differences that separate the two apart.
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Manufacturer |
Supplier |
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A company that makes goods from scratch. The process often involves producing the products, assembling them, and designing them before delivering them to merchants. |
A center that provides products to merchants. A manufacturer, wholesaler, retailer, and the like can be classified as a supplier. They do not produce but rather source goods from another party to deliver them to merchants. |
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Flexible product customization due to the total control over production. |
Limited product customization since they offer market-ready products. |
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Lower prices are possible when products are sold directly to direct-to-consumer (DTC) businesses. |
Prices can be higher if suppliers source products from another company before delivering them to merchants. |
For you to have a closer look at how a manufacturer works versus a supplier, take the examples of Nestlé and Alibaba.
Nestlé is a well-known manufacturer of food and beverage products across the globe. Its business model is the epitome of a standard manufacturer: Nestlé sources raw materials and ingredients (milk, cocoa, etc.) from farms and produces a vast number of goods in manufacturing plants. The company is also in charge of quality control, food safety adherence, and other measures before distributing the products to retailers around the world.
As for a supplier, Alibaba is a household name. It is a widely accessible online marketplace that connects retailers with customers. If you are looking for a specific product, chances are Alibaba will have it. As opposed to having its own manufacturing facility, Alibaba only acts as a middleman to house and bring products to worldwide buyers.
Now that the basics have been laid, we’ll delve deeper into the process of finding a manufacturer for eCommerce merchants in the chapter below.
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How to Find a Manufacturer in 6 Steps
A manufacturer shoulders a series of work before delivering a product to your inventory, so the scouring process should be extensive and rigorously handled.
1. Define Your Business Goals
You first ought to pinpoint what your end goals are before seeking a suitable manufacturer. Start by identifying your ultimate quality in a manufacturer: large-scale or locally-run? cost-effective or quality-above-all?
These kinds of questions will help you categorize different groups of manufacturers, and know what to go with based on your needs.
Another aspect to explore is the specific product requirements since not every manufacturer in the same industry operates the same. Some details to consider are quantity, materials/ingredients, design, and the like.
The more in-depth you go, the better it is to find your best match.
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2. Weigh in Your Options
You have gotten a hold of what to look for, which comes the next question: where to find manufacturer options?
This almighty search engine can shorten your path to find the manufacturer that aligns with your business objectives the most. By optimizing advanced search, it’s as easy as pie to pinpoint keywords that will garner what you need.
Alibaba
A plethora of manufacturers (mostly China-based) use Alibaba as a host platform to reach shoppers around the world. Simply search for products and browse various manufacturers at your disposal.
If opting for an overseas manufacturer is out of your comfort zone, rest assured. Several verified badges are apparent and help you check their validity without a doubt in the world. This platform is a foolproof start for business owners to experiment with foreign products and partners.
NAICS stands for North American Industry Classification System - a standard used to classify operation businesses across the region. This way, each establishment and product comes with a code, meaning you have the liberty to find credible manufacturers and evaluate them with ease.
Online Directories
If you want a one-stop shop for all things manufacturers, wholesalers, and suppliers, go straight to these versatile online directories.
3. Research Your Manufacturer
Thoroughly vetting your manufacturer options plays an important role in determining the most ideal one and saving time on the rest. Consider adding the tasks below to your to-do list:
- Check the business certificates and legal papers to ensure legitimacy
- Look for customer reviews and feedback to get a fair assessment of their expertise
- Conduct virtual/on-site facility tours to get a hold of their production capacity
- Gather information on their quality assurance process, especially with overseas ones
- Take note of their responsiveness in the research process
- Estimate the customization flexibility
Learn more: 10 Best Dropshipping Suppliers in USA (2024)
4. Communicate Your Product Designs
Your products will impose your brand identity, hence the gravity of conveying your idea conspicuously on the very first order. If you have a certain product concept, make sure to find manufacturers that allow for this flexible customization.
Preferably, these ideas should go beyond verbal discussion and also take the form of drawings, mock-ups, video demonstrations, animations, and so on. Then, request samples and place a trial order.
Make sure your product idea is conveyed perfectly before advancing to the next step.
Once both parties have established a mutual understanding, keep a close observation of the production, assembly, and design of your products. Finally, when the good arrives, ensure to inspect it thoroughly to send constructive feedback to the manufacturer.
Since unexpected mishaps are bound to occur, this so-called trial period is essential to the longevity of your business. For more intel on each step, jump here.
5. Negotiate Pricing
Pricing is an influential factor that every merchant is aware of. Since manufacturers stand at the head of the supply chain, any investment in this stage will largely contribute to your long-term profit margins.
The pricing strategy begins at the market research phase, where you can request quotes from potential partners for comparison. If any manufacturer manages to pass the trial period, it is now your duty to negotiate pricing.
Take these prime aspects into account: production costs, materials, facility maintenance, labor costs, and shipping fees. Once you have come up with a price list, remember to touch on the payment schedules, minimum order quantities, special order costs, and other additional expenses.
Pro tip: Try to be cordial, but still firm on your stance to negotiate the most ideal price that benefits your business’s goals and budgets.
6. Finalize the Contract
If you are able to reach the final step, congratulations! It is time to establish an official partnership with your chosen manufacturer. This last step will be the coup de grace of your manufacturing hunting journey.
That said, don’t lose your focus yet. Your job is to communicate with your partner to draft a business contract where both parties get to chime in on the prearranged terms. Any misunderstanding or request will be resolved before both sides proceed to review and sign the official version.
By signing the contract, you will lock in a new partner that works alongside your business in the near future.
And voilà! Your manufacturer just gained a new client, and you are now edging closer to building your eCommerce empire.
Disclaimer: This guideline is made to cover a general process of finding a manufacturer, without local regulations and laws in mind. If you are unsure about what to do at any stage, it is a good call to seek legal advice for your own protection.
Tips and Tricks to Find the Best Manufacturer that Works Well with Your Business
A matching partner will help you ease through the business procedures and omit risks as your store progresses.
Following a pre-set guideline is great, and the handy tips we have composed below will make your business venture even more rewarding. Let’s see how you can work them to your advantage.
Evaluate Local vs. Overseas Options
A local manufacturer seems like the most logical, given the fast shipping time and more hands-on quality control. However, depending on one’s business model, an overseas one might be the golden goose due to the lower production costs and more product varieties. Thus, considering which one is above the other is counterintuitive.
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So, what are the preemptive measures to determine which way you should lean towards?
If you value quality and sustainability above all, or a small business that frequently places small orders, a local manufacturer is your better half. The convenience in distance and communication means less carbon footprint, more controlled regulations, and flexibility.
On the contrary, if you aim to reduce production costs, require large quantities, or plan on selling goods that are not the local companies’ fortes, an overseas manufacturer is the most ideal. There is a multitude of eCommerce that have found major success doing business with manufacturers from China, India, South Korea, and Mexico.
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Ensure that the Credential Check Goes Both Ways
Finding a manufacturer is a two-way street. While you are on the hunt for the most compatible partner, so do they. Thoroughly vetting the potential manufacturers and establishing a professional business presence are the necessary steps to succeed.
Vetting the potential manufacturers: verifying required certifications, standard compliance, and fact-checking the reviews are crucial once a company catches your eye. Once the first interaction is established, responsiveness and customer support are the next criteria.
Pro tip: If you decide to advance with the vetting process, conduct virtual/in-person tours and request sample orders to ensure overall legitimacy.
Let the potential manufacturers vet you: when it is time to flip the script, make sure to get your business information ready, including legal papers, operation permits, and the like.
If you have an online presence or references from past partners, the validity is strengthened. Then, when it comes time for communication, be transparent and upfront about your desired design, quality, and quantity. All these attributes are the key to your rectitude and mutual benefits.
All in all, this simultaneous check is vital for businesses of any size to weed out incompatible candidates and move you up the path of finding the most suited manufacturer.
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Start with a Trial Period to Minimize Risks
Test orders enable merchants to have a final say in whether this manufacturer is fitting or not, hence their undeniable importance.
A trial period is a much-needed procedure for business owners to test the waters with promising partners, and it is not limited to manufacturer hunting either. Whether your goal is to find suppliers, retailers, or wholesalers, it is best to tread lightly. Here is a general outline for your consideration:
- Propose a trial period: most manufacturers offer trial services based on your scope. Draft an agreement and be clear on the end goal, duration, product quantity, delivery, payment, etc.
- Place a trial order: place a test order with specific requirements.
- Supervise the order process: keep an eye on the timeline, communication efforts, and delivery situation for future reference.
- Quality control and feedback: carefully inspect and test the quality of the products to provide detailed feedback. Any occurring issue should be addressed and troubleshot at this stage.
- Overall review and make a decision: circle back to the set objectives and evaluate the manufacturer’s product, service, and long-term compatibility. If things go well, this is when an official business construct should be finalized.
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Key Takeaways
Depending on your business objectives, there are manufacturers that fit the mold and some don’t. Your task is to scour for the best one, with this guide being the aid that you need. Keep in mind that trials and errors are expected, and each one will take you closer to the best manufacturer that helps your store grow. Now go out there and get ready to elevate your business.
FAQ about Finding a Manufacturer for Your eCommerce Store
